Partial court victory for entrepreneur who lost his company
Av The subject of the dispute is the advice that Norma Advokater gave Mikael Kubista in connection with ownership changes in Tataa, which was then a rapidly growing lab company in Gothenburg. The company was, among other things, the first in Sweden with COVID tests and had received awards for its outstanding technology.
The events surrounding the takeover, previously described by Life Science Sweden, ultimately led to Mikael Kubista losing his company and suing his law firm for incorrect advice.
The law firm requested that the case be dismissed by the Gothenburg District Court and instead decided by an arbitration board, but now the court has rejected the firm's arguments.
The decision means that the case of negligent advice will be examined on its merits by the district court, and that the limit on potential damages of five million SEK that Norma wanted to assert will not apply.
The background is that the company, where Mikael Kubista was co-founder and CEO, needed to raise new capital and therefore brought in the American investment firm Care Equity as the majority owner.
It ended with Mikael Kubista being dismissed, accused of deliberately trying to harm the company, and Tataa later stopped paying his severance pay.
Accused of going behind the back
In connection with the ownership changes in Tataa Bioscience, Mikael Kubista and the other "old" owners of the company carried out an upstream merger between their holding company and a newly formed company, whereby the first would be dissolved. This was done, according to Mikael Kubista, on the advice of the law firm, and the purpose was to correct a previous mistake by the involved lawyers.
According to Swedish law, such a merger results in the acquiring company taking over all the rights and obligations that the dissolved company had.
But the move turned out to be a big mistake.
The agreement with the American company contains a clause meaning that no transfer of shares in the company to another party may take place without written approval from the American company. Mikael Kubista was not aware of this, and apparently neither were his Swedish lawyers.
The response from the American company was harsh.
On June 11, 2023, Mikael Kubista was dismissed and had to leave immediately as CEO of Tataa. A new board was elected, and Kubista and two other members were dismissed and accused of going behind the company's back when they carried out the upstream merger.
The shares in the company that remained after the merger – which at that time were said to be worth around 77.5 million SEK – were declared forfeited according to the agreement and lost all their value in Kubista's holding company.
To get their money back, Mikael Kubista and others in the holding company chose to sue Norma Advokater, which they claim caused the costly mistake by not providing correct advice.
Norma denies acting negligently and argues, among other things, that it was not part of the law firm's assignment to assess whose consent needed to be obtained before the merger.
Primarily, however, the law firm argued that the case should be dismissed and that the dispute should be decided by an arbitration board, in accordance with Norma's general terms. These terms would also mean that any liability for damages would be limited to a maximum of five million SEK.
Mikael Kubista, on the other hand, claims that he was never informed about Norma's general terms.
The Gothenburg District Court now states that the law firm did not do enough to make Mikael Kubista aware that the general terms applied to their business relationship.
"Simply attaching a reference to the terms in an email in the way Norma has done has not been sufficient," writes the court.
Thus, the question of the damages claim will now be assessed by the court on its merits, without a fixed limit on the amount of damages.
In addition to the dispute over negligent advice, Mikael Kubista is involved in several other legal cases related to the Tataa affair. Among other things, Care Equity's American CEO Peter Batesko has sued Mikael Kubista and his lawyer for defamation, related to statements they made in submissions to the district court in the case against Norma.
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